Former telecommunications commissioner, Dr Ross Patterson, has recommended that UCLL and UBA prices should be set by legislation until 2020, in an independent report prepared for and included as part of Chorus’ submission on the Government’s Discussion Document entitled Review of the Telecommunications Act 2001 (Discussion Document).
According to Dr Patterson, the current regulatory framework is not appropriate to support the transition to fibre.
“The ladder of investment regulatory framework that is currently in place is designed to encourage network competition that over time will remove the natural monopoly aspects of the access network.
“However, the structural separation model adopted through UFB accepts that the access network is a natural monopoly and building competing networks is inefficient. The two frameworks cannot co-exist efficiently,” Dr Patterson.
The uncertainty caused by a regulatory framework that is no longer fit for purpose has led to the Government being required to intervene on copper pricing, he said.
“The relative pricing of copper and fibre services was a key element of the migration strategy that was built into the contractual component of the regulatory environment. The Government has made it clear that it does not intend to provide a demand side subsidy to incentivise migration to fibre. Under those circumstances the only practical option is to adjust copper pricing along the lines proposed in the Discussion Document,” he said.
Dr Patterson’s other suggestion included a mandatory migration process from the end of the build period to avoid inefficiency of two networks operating at sub-optimal capacity and reference offers approved by the Commission.
The Chorus submission, which supports the government’s initiative to update policy, also includes submissions from Richard Hooper CBE, ex-deputy Chairman of Ofcom in the UK, and Professor Stephen Littlechild, Emeritus Professor, University of Birmingham and the first UK Director General of Electricity Supply.